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I know this site is for REO Professionals, but thought I might find some help with a Short Sale.

Mortgage Insurance Negotiations

Thought I would bring this to everyones attention. I have a Short Sale with BofA, 100% financed purchase money loan from 2007. Since it's 100% financed there is Mortgage Insurance on the loan. We have had this home listed for over 380 days, have had 4 Bank Approvals (All coming 80+ days after the offer is written, thus the buyer walks) and as of recently the bank is telling us and the seller, he must agree to pay the Mortgage Insurance Company $10,000. Now this $10,000 can come in the form of cash, or promissory note, but can not come from the proceeds of the sale.

BofA would not give us the MI companies contact information for over 9 months, they stated neither the seller nor I had the right to contact the MI company. After several hours on the phone with the LM at BofA we finally got the MI information.

The MI company would not return my calls so I had the seller contact them. After 10 days of calling and leaving voice mails for the representative at the MI company, the seller negotiated a deal.

Upon receipt of this news both the seller and I contacted BofA in hopes of keeping the buyer and finally getting this short sale done. Now, even though we had an approval on the price and we're simply waiting for the MI company to sign off, BofA has closed our file and is requiring us to begin the process all over. According to BofA, this is due to the 10 days it took for the MI company to negotiate with the seller.

Frustrating is the nicest word I can think of. I feel like this is robbery. Doesn't the MI company insure the loan in the event of Foreclosure or Short Sale? Why is this like an act of Congress when we already have an approved price? It's almost as if BofA would rather Foreclose than work out a deal.

Please correct me if I'm wrong, but having the MI company require money from the seller is like crashing your car and your car insurance requiring you to come up with large amounts of money to replace it. What is Insurance for if we have to pay anyway?

Thanks in advance for your time and input!

Kindest Regards,
Troy Sage
“Covering All Angles”

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Replies to This Discussion

Troy,
B of A is pulling your chain. You need to take your deal issues to a higher level in B of A. Also, was the Mortgage Insurance Policy paid by your client,if so they should have the info. I would go around B of A and contact the MI Company and not rely on B of A.
Adrienne

Thanks for the reply. The MI is part of the sellers monthly payments, paid directly to BofA. We did find out the MI company info and called them direct. Took 10 days to get the MI company on the phone. The MI company has made a deal with the seller and now BofA is saying we need to resubmit the entire Short Sale Package and start all over. It sounds like a lot of crap to me.

We have asked to speak with supervisors at BofA regarding this file, and we're being told the person that has our file is the Supervisor. When we ask to speak to his supervisor, we're told he doesn't have one. It's a complete joke.

Thanks for you input, I sincerely appreciate your time.

Troy Sage
I am working a short sale right now with Bank of America that isn't going smoothly. I finally found someone who seemed to be very helpful but, contact me directly and i will give you his information.

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